NOTE: Incentives through this program are not yet available. Electric distribution companies have until Nov 15, 2014 to submit tariffs to the Public Utility Commission (PUC). The PUC, in turn, has until March 31, 2015 to approve the tariffs.

In 2014, Act H 7727 created the Renewable Energy Growth (REG) program with the goal to the promote installation of grid connected renewable energy within the load zones of electric distribution companies (EDCs) at a reasonable cost. This tariff-based incentive program is designed to finance the development, construction, and operation of renewable energy distributed generation projects through competitive bidding processes over 5 years to achieve specific megawatt (MW) targets. This program is implemented by the EDCs under supervision and review of the Public Utility Commission (PUC).

For period of at least 5 years, the EDCs shall file tariffs with the PUC that are designed to provide multi year performance based incentives to eligible renewable distributed generation projects. Tariffs shall be developed by the EDCs and will be reviewed and approved by the PUC. Proposed tariffs shall include a ceiling price and term lengths that shall be from 15 to 20 years. After being approved by the PUC, the terms under the tariffs shall not be altered in any way that would undermine the reliance of those tariffs. The EDCs shall file the first set of tariffs and solicitation rules with the PUC by November 15, 2014, which the PUC shall review and approve by March 31, 2015.

Program Goal
The REG program has target install total of 160 MW of distributed renewable energy during its 5 year term. The first year of the program (2015) has an annual target of 25 MW, 40 MW for second year, 40 MW for third and fourth year, and rest of the 160 MW for the fifth year. There is also an annual target of at least 3 MW for small scale solar projects for first 4 years of the program.

Bidding Process Small-scale and medium-scale solar projects will submit an enrollment application to receive a standard performance based incentive for the period of years in an applicable tariff. The applications shall be selected on a first come, first served basis or by means of commission-approved lottery.

Large scale and commercial scale solar projects and all other eligible technologies shall bid a price per kilowatt-hour (kWh) for the entire output of the facility, which does not exceed the ceiling price. The EDC will select projects based on the lowest proposed prices, time of completion of the project, and award performance based incentives to the winning bidders. In order incentivize renewable distributed generation projects, the EDC may include an incentive payment adder to the bid price of any winning bidder that propose a distributed generation project in a desired geographical load area.

The REG program shall be administered exclusively through the tariff structure and the EDC is not required to execute a power purchase agreement (PPA) for the procurement of the renewable energy for the program.